THE FEDERAL CRISIS

Poverty Bay Herald, Volume LV, Issue 17410, 7 November 1930, Page 8

THE FEDERAL CRISIS

MR. SCULLIN PERTURBED POSITION VERY SERIOUS (Elec. Tel, Copyright—United Press Assn,) (Received November 7,2 LONDON, Nov. 6. When reports that .Mr. Lyons had resigned, and that .Mr. Kenton might follow, reached London, Mr. .Maloney telephoned to .Mr. Eeliton, who denied the resignation reports, lie admitted that the position was very serious, hut hoped that.- it might yet lie saved. Mr. Scullin said lie had not received any communication from Mr. Lyons or Mr. Fenton, and was unable to comment. Mr. Seullin is perturbed at the action of Hie caucus, and would regard the loss of Mr. Lyons’ services as a disaster. He considers that Air. Lyons lias done wonderfully good work, and shown a clear appreciation of Australia’s position. THE CAUCUS PROPOSALS NOVEL FINANCING BANK REJECTS SCHEME (Received Nov. 7,2 p.in.) SYDNEY, Nov. 7. Correspondents at Canberra state that the Labor caucus differences arose l over tlio necessity of raising £27,000,000 to meet loans maturing in December. Mr. Lyons proposed to raise -a. loan lor this amount in about a month’s time to cover the indebtedness.

A section of the party which opposes borrowing succeeded in defeating this and carrying a motion demanding the immediate, passage of legislation compelling bondholders in £27,000,000 loans to hold their bonds ior a further 12 months, the interest to be paid as usual, with a, proviso that necessitous persons may receive an immediate payment of small amounts from the Coin inonwcallli Bank, which would then hold these cashed bonds as non-interest bearing securities. The sponsors of this motion stated that tlie object, was to avoid repudiation of the Commonwealth debt, to slop the traditional method of borrowing, and to test the extent to which the resources of the Commonwealth Bank could- he utilised to meet national needs.

Air. Lyons told the caucus that Bit' Robert Gibson had refused to listen to Air. Gibbons’ proposal, made L> the famous last week, that the Commonwealth Bank should underwrite the maturing loan. This statement caused an uproar, members demanding to know why Sir Robert Gibson, a. servant of the .people, should be permitted to ant as a, dictator.

Mr. Lyons declared that: the policy proposed by the caucus could only lead to political oblivion. Air. Anstey, the mover of the motion, is mentioned as the probable. Treasurer if Mr. Lyons resigns.